A person who is the best looking person in a small town but when in a larger urban setting they are nothing special.
Or someone who is the best looking in a small setting, ie a party or a smaller club.

2 examples.
1. when your in a small town and your buddy says wow that chick is so hot and you reply "shes only small town pretty"

2. You meet your buddies girlfriend and tell him "yeah shes ok, shes small town pretty"